Scaling Innovation

INNOVATING INTO THE FUTURE: JAMES ALLWORTH

A fellow at the Forum for Growth and Innovation at Harvard Business School, James Allworth has an MBA from Harvard and previously worked for Apple and Booz and Co.  His work focuses on technology and disruption. He is a regular contributor to the Harvard Business Review and co-author of the bestseller How Will You Measure Your Life? (with Clay Christensen and Karen Dillon, 2012).

Now, Allworth is based in Palo Alto, and is director of strategy at the late stage start-up, Medallia.  He talked to Thinkers50 co-founder Stuart Crainer.

How do you explain what you do and who you are? You’re not easy to categorize.

No.  And on some level I like that about myself.  If there’s a common thread that runs through everything that I’ve done it’s that I’ve pursued things that I’m interested in.  It’s never necessarily been an industry focus, nor an academic versus professional focus, or anything like that.  I’ve been really lucky to have had opportunities to go out and do interesting things and whenever an interesting problem or an interesting opportunity presents itself, I really can’t help myself.  It doesn’t matter what it is, if I think it’s interesting I’ll jump on it.

And that links your work at Booz, Apple and at Harvard?

Yes, coming out of undergraduate studies I, like a lot of people, didn’t entirely know what I was getting myself into but consider myself very fortunate to have landed in management consulting – it’s a great grounding for thinking about big business problems.  And I also had a number of very rough edges that I had ground off while I was in consulting, did some really interesting work, strategy and operations, throughout Australia and South-East Asia, got to live in Thailand for a year and in Indonesia for six months.

After business school, I got some time at Apple which was fantastic, working in their retail team looking at how they sell to business customers, and then got an opportunity to work with Clay Christensen which was really never part of the plan.

Why did you go to business school in the first place, what was the attraction?

Intellectual curiosity and stimulation. I visited Harvard  before I accepted and you just get that sense from wandering around the campus and visiting their classrooms and seeing people talk in between classes and what they’re talking about.  Environments like that are magnetizing.

Tell us about the class by Clay Christensen which proved important.

Yes, the class is called Building and Sustaining a Successful Enterprise. It’s one of the most popular elective classes and the basic idea is that every class you come in and you learn about a new theory and then you discuss the theory in the context of the case.  It is slightly different from most of the other classes at HBS in that most of them are primarily focused on the cases. This is different in that you focus on the theory and the case is only there as an opportunity to ground the theory and have a discussion about it.

How did you make the leap from the classroom to becoming a co-author?

Clay and I got along really well and I don’t know if it was in part because of my Australian heritage or perhaps because I was slightly ignorant and would always stick my hand up and ask difficult questions. I imagine a number of professors wouldn’t like that but Clay absolutely loved it.  He asked me whether I’d be interested in sticking around for a little while and working with him afterwards.

What did you learn in the process of writing the book, How Will You Measure Your Life with Clay and Karen Dillon?

I learnt a lot. When Clay talked to me about doing this and I agreed, we didn’t actually know what it was that I was going to be doing, the book kind of emerged. Karen and Clay worked together on that article that was in the Harvard Business Review that bears the same title. Clay and I were talking about working on something more marketing related and a week after I started he had a stroke.

We’re very fortunate that he made a full recovery but events like that just cause you to stop and think about life. I found myself drawing on Clay’s last class where he takes all the theories and writes them up on the board and then writes three questions beside them – How can I find happiness in my relationships? How can I find happiness in my career? How can I stay out of jail?

From my perspective I certainly don’t have all the answers and part of what I really like about the way that Clay approaches problems in general is that he doesn’t think he does either, but he has a knack for asking great questions and he’s also got an amazing ability to look at research and see whether it’s causal in nature. That means when you apply it to different fields you’re able to get deep insight into the questions that you’re asking.

And part of the appeal of working on the book was that it was not just an opportunity to share this thinking but it was also an opportunity for me to think about it in the context of my own life and, yes, applying the theories and writing about them and spending the time with Clay and Karen working on them and pushing our thinking forward was immensely valuable.

Twenty years ago it was very easy for us to say these are the strategy guys, these are the innovation guys, these are the entrepreneurial guys, but you can’t do that now. People such as yourself seem to defy categorization!

This reflects something I believe in: that the most interesting things happen on the boundaries where you find intersections between various fields.  What drives me in terms of what I apply myself to, what I write about, is literally nothing more than things that I’m interested in and things that I become passionate about.  When you focus on things like that it becomes easy to do a really good job; to write things that people deeply engage with; to build ideas that end up having an outsized impact. I’m naturally a bit of a generalist and I think there’s value in being like that.

Even so, it’s a big leap from Harvard to Palo Alto.

Less so than you might think actually.

Tell us about the ideas you are currently working on.

One of the things that I’ve become really fascinated with is the intersection between motivation and organizational structures.  Now if you think about the world 50 years ago, it was very much set up to optimize organizations to ensure that they were able to control the largest number of resources possible. Scale was critical to winning, whether in the military or in business.

If you think about the way that the world has changed in part as a result of technology, scale is not necessarily such an advantage any more.  Rather than the organizations that are able to command and control the most people being the ones that end up winning, it ends up being organizations that are able to attract the best people and get the best out of them.

What’s interesting about this is that organizational structures have not really adapted at all to this new world.  There’s a lot of scope to improve the way organizations are designed to get the best out of the people that are working inside of them.

There’s one example that people like to talk about that really illustrates this well and that’s Valve Software, a gaming company based in Washington State. When people are hired into Valve they are given a desk with wheels, nobody is able to tell anybody else what to do, there’s no boss, there’s no hierarchy, you’re literally able to do whatever you want.  And what’s interesting is it really taps into peoples’ motivations. People no longer do things because they have been told what to do or they feel they have to, they start to do things because of intrinsic motivation, they become passionate about the project, opt into it, or come up with an idea and they sell other people in the organization on the project and get other people excited about it and then they drive through to completion based on that intrinsic satisfaction from getting something done, doing something great, getting it out the door.

It’s something that I want to explore further.  It’s really interesting in the context of how technology has enabled fewer and fewer people to have a greater and greater impact in the world, but the way organizations are designed has not evolved, with very few exceptions, to recognize that change.

But isn’t there a sense that it’s the ambiguity people can’t cope with or uncomfortable with – historically?

The types of problems that people in organizations are getting outsized rewards for tackling are the ambiguous ones where there aren’t clear answers. The people best suited to attacking those problems are comfortable with ambiguity, they’re attracted to ambiguous, loosely defined and hard to solve problems, and need to have an organizational structure that is helpful rather than a hindrance to them.

Though you have worked in two of the most stratified and organizationally traditional industries, management consulting and academia?

Yes.  I mean I have though so you’ll get no argument from me about the fact that management consulting is very stratified, at least in terms of titles, but on the teams that I’ve worked with it always felt incredibly flat.  There was never an instance where I felt like my role was to be seen and not heard – it was an environment where people were encouraged to speak up.

Now academia is similar, but one of the things I observed in working with Clay is that he absolutely trusts everyone he works with to do the right thing.  His question is not when are you going to get this done, his question is always what can I do to help you, what can I do to help you be effective?

And you know when someone takes that attitude with you they empower you and it really tends to bring out the best in people. 

And you talked about scale as well?  The different nature of scale changing?

Yes, I have a colleague from the Forum for Growth and Innovation, Max Wessel, and he’s converted me to the idea that effectively scale is becoming commoditized.

For example, if you wanted to set up a web company ten years ago you needed to buy servers, storage, and set it all up yourself.  But all that capex has been turned into opex.

There are always organizations like Apple that have to do it themselves because they’re pushing the boundaries, but for a lot of organizations scale is available to be bought. You don’t have to get on the ground in China, build your own factories and do all these kinds of things.
So the traditional version of scale has been commoditized , but what’s replacing it?

To what extent are you putting your ideas into practice at Medallia?

There is always a balance between thinking and the doing.  I definitely think though that the extent to which I’ve been lucky enough to be exposed and have a good understanding of Clay’s research is really helpful.  He informs a lot of the discussions I have with people and I’m able to use it to inform the projects that I’m undertaking as well. I don’t think it would be possible for me to go into work every day and not rely on that research and those theories to a greater or lesser extent.

One of your other interests which is intriguing is the rise of autonomous vehicles.

This is very much further afield: how is the world going to start to change as a result of autonomous vehicles, drones and self-driving vehicles. I think that’s going to prompt an absolutely massive shift and there are a number of really interesting companies out here doing things relating to this.  I’ve been able to meet a few of them and just thinking about how the world’s going to change as a result is absolutely fascinating.

What’s going to be very interesting to see is what happens to a lot of the vehicle manufacturers as these self-driving vehicles get to the point where they’re ready to be deployed. We live in a world where when someone wants a car they go out and buy one and the utilization rates run at 10 percent or less. Most of the vehicle’s life is spent parked.  If these self-driving vehicles take off thinking how the world changes as a result is absolutely fascinating. Utilization rates go up.

Personal transport then begins to look a lot more like the airline industry than it does at present where you have a few manufacturers. Effectively, the vehicles become commoditized and there are likely to be only going a few manufacturers left.  Nobody really cares whether they fly in a Boeing or Airbus plane any more and that’s going to be the same in the future with vehicles.

The question then becomes who is well-placed to take advantage.  This is where I wonder whether a UPS or a FedEx is actually quite well positioned. They’re used to deploying lots of capital to move things round — right now it’s parcels but I wonder how much of a stretch it is to change that to humans?  The other organization I wonder about is Uber. Now they’re just a car riding service, but they’re also generating vast quantities of data around daily movement patterns, weekly movement patterns, monthly movement patterns, where vehicles are needed, where people ride to and from. They announced something around financing cars and I wonder whether this isn’t a step to them thinking further down the line of owning a fleet of autonomous vehicles.  And it sounds science fiction like but that’s the direction where we’re heading and it’s really interesting to play out the impacts of that, how the world looks so different.

What about Silicon Valley, has that been energizing?

Absolutely.  I mean there’s just so many cool people out here doing so much cool stuff it’s impossible to stay on top of it all.  I’m living a couple of blocks away from Stanford and there are always interesting things happening here, seminars and so on, you just get to meet some fascinating people working on fascinating projects. It really feels to me like this place is changing the world right now and listening and hearing more about all the things that people are doing and getting to play a small part in that myself, it’s really been fantastic.

There’s no plan for the future?

Well the plan remains, as it always has been, as long as things are interesting and I remain passionate in what I’m doing, I’m learning new things and I’m working with great people, then the plan remains to keep doing that.  And right now I’m very, very lucky to be at Medallia doing exactly that and I hope that continues.